During an operational activity every startup faces with the need of more capital to grow. Acquiring of capital is usually organized in a series of subsequent investment rounds. Founders then come across a dilemma where to get the funds from. From this article you will learn, what advantages can you achieve by collecting the funds for your startup from equity crowdfunding and what are the main differences between it and an investment done by a venture capital fund. The article has been written with the special focus on the Polish situation, but the general principles remain universal.
Nowadays, there are a lot of sources of company’s external financing, including 3F (Family, Friends, Fans), domestic government funds, EU funds, business angels’ nets, seed and venture capital funds. Within several years we became a witness of rising popularity of equity crowdfunding. What are the implications for a startup? On a crowdfunding platform it can acquire capital from individual investors under conditions proposed by founders. It means that ECF is an interesting and striking alternative for a venture capital.
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